Iraq is negotiating with a Chinese company that could replace South Korea's Daewoo Engineering & Construction (E&C) in the Al Faw Grand Port project due to persistent rifts, an Iraqi official was quoted on Thursday as saying.

Mudf Azerjawi, a member of Iraqi Parliamentary commission in charge of the Grand Faw Port project, said a new contract could be signed this month for the completion of the project which was awarded to Daewoo E&C nearly three years ago.

He told the official Iraqi daily Alsabah that the government is still negotiating with Daewoo to settle differences over the firm's demand for more money, adding that Daewoo offered a compromise that was rejected by Baghdad.

"Daewoo agreed to lower its demand to $2.65 billion but Iraq wants it to further reduce the sum...negotiations are still continuing with the company and another Chinese firm for the completion of the project," he said.

Azerjawi did not identify the Chinese firm but said it had made an offer to the Transport Ministry to carry out that project.

"The Ministry is considering that offer but it does not want to lose the South Korean company for several reasons including that it has become familiar with the area and its machines and equipment area still on the site," he added.

In February, UK-based Portstrategy.com news portal had, in a report titled: Al Faw - Rice Bowl Rationale?, said that part of the breakwater, constructed by Daewoo and Archirodon, was collapsing.

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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